2010-07-01 09:32

GENEVA: The World Trade Organization (WTO) on Wednesday ruled against the European Union in its long-term dispute with the United States over alleged illegal subsidies provided to Europe's aviation giant Airbus.

In its final ruling report, the WTO expert panel confirmed US complaints that the EU and some of its member states had provided "prohibited export subsidies," thus violating related WTO agreements.

The report also backed the US in arguing that "the effect of the subsidies is to displace the imports of a like product of the United States into the European market, constituting serious prejudice to the interests of the United States."

It said that the EU subsidies had also affected US aircraft exports to other major markets in the world.

"We conclude that, to the extent that the European Communities, France, Germany, Spain and the United Kingdom have acted inconsistently with the SCM Agreement (Agreement on Subsidies and Countervailing Measures), they have nullified or impaired benefits accruing to the United States under that Agreement," the panel report said.

It urged related EU member states to withdraw their WTO- prohibited subsidies "without delay", which means that they must to do so within a period of 90 days according to the SCM agreement.

The United States first brought the case to the WTO in 2004, alleging that the EU had provided billions of Euros in various forms of subsidies to Airbus, including so-called "launch aid" to its A380 and other major aircraft models, which violated WTO regulations.

In the same year, the EU also brought a case against Airbus' American rival, Boeing, alleging that the US government had funded the company illegally.

The WTO's final ruling on the Boeing case are expected to be issued later this year.